Two leading tribal health care organizations in Alaska have initiated lawsuits against the U.S. federal government, demanding the reimbursement of millions of dollars in what they claim are outstanding funds. The Southeast Alaska Regional Health Consortium (SEARHC) and the Yukon-Kuskokwim Health Corp. (YKHC) lodged their legal actions last Thursday and Friday in the U.S. District Court of Alaska. The U.S. Department of Health and Human Services (DHHS) along with its Secretary, Xavier Becerra, are named as the defendants in this case.
YKHC’s legal filings assert that Becerra and his department are in arrears, failing to pay approximately $26 million in contract support costs that have accumulated since the fiscal year 2016. These costs encompass various expenditures such as indirect administrative or overhead costs, and other regular expenses like financial management services and workers’ compensation insurance.On another front, SEARHC has brought forward a lawsuit seeking $8 million from DHHS for unrecovered expenses. This legal action focuses on costs incurred through billing services for private insurance, Medicare, and Medicaid. The lawsuit elaborates on how DHHS’s Indian Health Service did not fully compensate for the indirect expenses associated with managing payments received from these entities in 2016. Despite being primarily funded by the health service through the Alaska Tribal Health Compact, SEARHC contends that the federal government is still responsible for covering all contract support costs, which include the billing-related expenses.SEARHC supports its claim by referencing several U.S. Supreme Court decisions. However, DHHS has a different perspective. In a 2023 letter to SEARHC CEO Charles Clement, the department refuted the claim, stating that the Indian Health Service had disbursed nearly $59 million to SEARHC in 2016. This amount included over $3 million for contract support costs and $17 million for indirect contract support costs. The department also mentioned that there was no agreement in the compact or Funding Agreement that explicitly included the contested $8 million in contract support costs for third-party billing as a reimbursable expense, highlighting that SEARHC did not provide sufficient evidence to support its additional claim.